Overview
- The board reduced the policy rate by 25 basis points to 7.25% in a 4–1 decision, with Subgovernor Jonathan Heath dissenting in favor of holding at 7.50%.
- Officials pointed to moderated inflation, a weaker domestic economy, exchange-rate dynamics, and global trade-policy risks in justifying the move.
- Near-term forecasts were adjusted—headline inflation nudged lower and core slightly higher—while convergence to the 3% target is still projected for the second half of 2026.
- The communiqué keeps the option of additional gradual reductions on the table, and market consensus points to the possibility of another 25 bp cut in December.
- Banxico’s stance now falls within the neutral range on real-rate estimates, and the peso strengthened about 0.2% after the announcement as the Fed’s recent rate cut provided supportive context.